Planning Your Business Exit Strategy And Timeline 2025 — How To Sell, Retire, Or Transfer Your Company Tax-efficiently

Selling or stepping back from your business is a milestone event — one that must be managed with precision and foresight. In 2025, CRA’s enhanced valuation audit systems, the revised capital gains inclusion rate, and Bill C-208’s evolving intergenerational transfer guidelines make exit timing and structure more crucial than ever. Mackisen CPA Auditors Montreal builds tax-efficient exit strategies that integrate valuation, corporate restructuring, and succession planning to protect wealth, minimize taxes, and ensure a smooth transition whether you’re selling to family, management, or an outside buyer.

Legal and Regulatory Framework

Income Tax Act (Canada) Section 110.6(2.1): Allows a Lifetime Capital Gains Exemption (LCGE) of $1,016,836 for qualifying small business corporation (QSBC) shares, which Mackisen optimizes across family shareholders.
Section 84.1: Prevents conversion of dividends into capital gains on related-party sales; Bill C-208 (2021) creates exemptions for legitimate family transfers meeting CRA’s management-involvement tests.
Section 85(1): Permits tax-deferred rollovers to corporations, supporting reorganizations before sale or family succession.
Section 70(5): Deems assets disposed of at fair market value at death, underscoring the link between exit and estate planning.
Section 55(2): Restricts intercorporate dividends used to strip surplus; our auditors ensure any restructuring stays within CRA rules.
Section 20(1)(a): Allows deduction of sale-related professional fees for accounting, valuation, and legal advisory.
Taxation Act (Quebec): Requires dual filing for provincial recognition of LCGE and reorganizations; Mackisen manages both CRA and Revenu Québec submissions to guarantee full compliance.

Key Court Decisions

McClurg v. Canada (1990): Confirmed family reorganizations are valid when supported by business purpose.
Poulin v. The Queen (2016): Approved LCGE use through trusts where documentation and valuations were complete.
Grosso v. The Queen (2014): Highlighted that corporations must meet active-business asset thresholds to qualify for LCGE.
Kieboom v. The Queen (1992): Supported share reallocations among family members for bona fide succession.
These rulings form the legal foundation for every Mackisen exit structure — compliant, defendable, and tax-efficient.

Why CRA Targets Business Exits

CRA’s audit algorithms now compare declared sale prices to industry EBITDA multiples, shareholder loan movements, and prior appraisals. Undervalued sales, missing share-purchase documentation, or non-compliance with Bill C-208 conditions trigger review. CRA also examines goodwill allocations and LCGE claims lacking 24-month ownership evidence. Mackisen mitigates all such risks by producing CBV-certified valuations, complete documentation, and synchronized federal-provincial filings before closing.

Mackisen’s Strategy

1. Timeline Design — We create a 3-to-5-year roadmap that aligns valuation growth, corporate cleanup, and personal retirement goals.

2. Valuation and Appraisal — Our Chartered Business Valuators deliver CRA-defensible fair-market valuations used for negotiation and audit protection.

3. Share Reorganization & Estate Freeze — Freeze current share value, issue new common shares to a trust or next generation, and redirect future growth tax-free.

4. LCGE Maximization — Structure ownership so each shareholder can claim their full $1,016,836 LCGE.

5. Transaction Structuring — Compare asset vs share sales and design the most tax-efficient route using Sections 84.1 and 85.

6. Due Diligence Management — Coordinate buyers, lawyers, and CRA requirements to prevent deal delays.

7. Post-Sale Wealth Integration — Reinvest proceeds through holding companies, IPPs, or trusts to manage retirement income and preserve estate value.

Real Client Experience

A Montreal manufacturing family engaged Mackisen five years pre-retirement. We structured a share freeze and LCGE-qualified transfer to their children under Bill C-208, saving $1.5 million in taxes.
A Quebec medical group sold for $8 million; Mackisen optimized LCGE, organized the valuation and closing, and reduced effective tax from 46 to 25 percent through integrated federal-provincial planning.

Common Questions

How early should I start planning my exit? Ideally 3 to 5 years before sale to meet QSBC, valuation, and LCGE conditions.
Can I sell to my family and still qualify for LCGE? Yes, if CRA’s active-management and ownership tests under Bill C-208 are met.
Is a share sale always better than an asset sale? Usually — share sales allow LCGE; asset sales often create double tax.
What documents does CRA expect? Formal valuation reports, resolutions, sale agreements, and tax elections filed within statutory deadlines.

Why Mackisen

Mackisen CPA Auditors Montreal are Canada’s experts in business exit and succession planning. Our CPAs, CBVs, and tax lawyers coordinate valuations, reorganizations, and CRA filings to ensure your sale is efficient and fully compliant. We help you retire, sell, or transfer ownership confidently — protecting your wealth and your legacy. Call Mackisen CPA Auditors Montreal today for your 2025 Business Exit Consultation. The first meeting is free and structured to secure your financial independence.